Anytime you buy something online and don’t pay an Iowa sales tax, you’re breaking the law. The Iowa Department of Revenue is launching an educational campaign to get Iowans to start paying “use taxes.” Revenue spokeswoman Victoria Daniels says it’s not fair if main street business collect sales taxes while Amazon and other big online retailers don’t.
Daniels says, “So, when you make a purchase on the internet and the sales tax isn’t collected, in effect, you’re putting those small businesses at a disadvantage.” As part of the campaign, Iowa taxpayers will be urged to go to the Department of Revenue website, then to popular links, then to the consumer use tax page to report your purchases.
The application will compute what is owed and accept payment. Daniels says all state employees, especially those at the Department of Revenue, will be expected to pay up. Daniels says, “Mind you, I plan to go through my credit card receipts and look at it and say, ‘Huh, this is a business that is not in Iowa. I owe tax on this.'”
There are two new methods for paying the tax online at the Iowa Department of Revenue website. “Look under the heading ‘Popular Links’ you’ll see ‘New Options to Pay Consumer Use Tax,'” she explains. Last year, conscientious Iowa shoppers voluntarily submitted only about $21,000 for the tax. Millions of dollars in state taxes that are required by law are going uncollected.
Besides internet purchases, the rules also apply to catalog sales. Congress may act soon to require all online retailers to collect state sales taxes.